On March 3, 2021, Chancellor Rishi Sunak presented his second budget in the UK Parliament. The budget aimed to support individuals and businesses as the UK continues to deal with the ongoing COVID-19 pandemic.
Here are the main points from the budget:
- Coronavirus Support: The Chancellor announced that the Coronavirus Job Retention Scheme, also known as the furlough scheme, would be extended until September 2021. The Self-Employment Income Support Scheme (SEISS) will also be extended until September 2021, with an additional fourth and fifth grant for those who are eligible. The Universal Credit uplift of £20 per week will also continue until September.
- Taxation: There were no increases in the main rates of income tax, national insurance, or VAT. The personal tax allowance, which is the amount you can earn before paying income tax, will rise to £12,570 in April 2021 and remain frozen until April 2026. The higher rate tax threshold will increase to £50,270 in April 2021, and also remain frozen until April 2026.
- Business Support: The budget announced a new Restart Grant to help businesses reopen after lockdown, worth up to £18,000 for hospitality, accommodation, leisure, personal care, and gym businesses. Business rates relief for eligible businesses in England will continue until June 2021, and then be discounted by two-thirds for the rest of the financial year. The Chancellor also announced a new Help to Grow scheme for small and medium-sized enterprises (SMEs) to help them develop management and digital skills.
- Infrastructure and Investment: The budget included several infrastructure and investment announcements, including a new UK Infrastructure Bank, a green savings bond to help fund green projects, and funding for the development of eight new freeports around the country. The Chancellor also confirmed that the government will invest £27 billion in new road-building projects over the next five years, as well as £15 billion in green initiatives such as offshore wind, nuclear power, and electric vehicle infrastructure.
- Housing: The budget included several measures to support the housing market, including a mortgage guarantee scheme to help first-time buyers secure a mortgage with a 5% deposit, and a new Help to Buy scheme for first-time buyers in the form of equity loans. The Chancellor also announced a new UK-wide scheme to provide vouchers worth up to £5,000 for energy-saving home improvements.
Overall, the UK Spring budget report announced significant measures to support individuals, businesses, and the UK economy during the ongoing COVID-19 pandemic, as well as investment in infrastructure, green initiatives, and housing.